The Future of WA Water Law

01 August 2016

In June this year, the WA Department of Water released its report ‘Water for Growth: Urban’1 on urban water supply and demand. The forecasts contained in the report support the current water reform agenda which is intended to address the pressures of population growth and a drying climate, as well as reduce the level of intervention by government in water allocation.

The legislative framework for water management in WA is spread across six different statutes, which were developed at various times to deal with specific water issues. For this reason, the system is described as fragmented and in need of modernisation. In order to better serve the needs of WA’s water users in the future, drafting of the Water Resources Management Bill began in March 2015.2 A draft Bill is anticipated later this year.

This update is the first in a series on water law that HWL Ebsworth Lawyers will publish to track the progress of the reforms and inform current licence holders about how the proposals will affect their water entitlements.

Background

Following a decade of stakeholder consultation on water resource management, the Water Services Act 2012 (WA) (Water Services Act) became operational in November 2013. The Water Services Act was the first step in the reform agenda and introduced changes affecting the water services sector, including minimum service standards in relation to billing, payment, complaints and service provision.

In October 2013, the WA Department of Water released the position paper ‘Securing WA’s Water Future’3 (Position Paper). Following its publication, widespread public, industry and stakeholder consultation demonstrated strong support for reform and the drafting of new legislation has begun. The Department’s most recent report published in June, ‘Water for Growth: Urban’ emphasizes the need for legislative reform to address how water is shared and managed in the context of climate change. The Government’s priority is to streamline and consolidate the water allocation and licensing framework across WA in a way that is responsive to the drying climate.

The outline of key proposals

In the Position Paper, the Government proposes changes to the existing licensing framework, and the introduction of statutory water allocation plans. One of the primary objectives of the reform is to reduce the level of intervention by government in water allocation by enabling the use of market-based mechanisms where appropriate.

Licensing

Currently, a licence is generally required to take groundwater and surface water from a ‘proclaimed area’ for commercial or industrial use. Allocation limits are not defined by law and a licence is usually granted for 10 years.

The new legislation will introduce criteria to the licence application process to ensure the level of assessment is commensurate with risk. Different criteria will apply to licence renewals, amendments and applications relating to bores. This will see the existing regime simplified in many instances.

To provide greater security of access to water over a water-user’s working life, it is proposed that licences could have 40-year terms. Licence trading would also be simplified, with provision made for ‘low risk’ trades to occur without the full assessment that is currently required.

Statutory water entitlements

The Position Paper outlines plans to introduce statutory water access entitlements. An entitlement will be considered a right to take certain units of water, which can be freely traded, mortgaged and bequeathed. Statutory water allocation plans will provide the rules for taking water from the ‘consumptive pool’, that is the aggregate amount of water that can be made available for use from a particular water resource.

A statutory allocation plan is likely to be prepared when:

  1. Water resources are approaching or have reached full allocation;
  2. The water resource is extensive, both in area and in the volume of water available for consumption;
  3. The science of the resource is sufficiently understood;
  4. A relatively large number of users are competing for access to the resource; and
  5. The benefits of establishing a consumptive pool and the supporting systems (including statutory water allocation plans) clearly outweigh the costs.

The development of allocation plans will be overseen by an independent advisory body and local water resource management committee. Voluntary local advisory groups may also play a role in informing and advising the Department of Water on local water management and allocation issues.

The current fixed annual volume regime will be replaced with a new mechanism for matching water use with water availability on a seasonal basis. These variations will not be compensable because they are seasonal and temporary. The Minister will determine the allocation limit for a water resource following public consultation. The volume of water accessible will be dependent on climate and other factors.

The Position paper indicates that the Gnangara groundwater area is likely to be one of the first areas to have a plan developed.

Implications

The licensing regime established under the Rights in Water and Irrigation Act 1914 (WA) will continue to apply until statutory allocation plans are introduced. Once the transition process begins, existing licences may be converted to water access entitlements in areas where allocation plans are introduced.

Building on the changes introduced by the Water Services Act, the proposed reforms will have widespread effects for water users. The Government envisages a better framework for management of the valuable resource. The introduction of trading opportunities for water entitlements will provide greater availability and more options for managing water allocation.

The success of the reforms may depend on the Government’s ability to use appropriate policy and regulation to balance the needs of water users with the protection of environmental water. A comprehensive public notification process will ensure licence holders understand the new system and obtain the correct entitlements.

This article was written by Charmian Barton, Partner.


1See: https://www.water.wa.gov.au/__data/assets/pdf_file/0016/8521/110200.pdf
2See: https://www.mediastatements.wa.gov.au/Pages/Barnett/2015/03/Water-reform-agenda-moves-ahead.aspx
3See: https://www.water.wa.gov.au/__data/assets/pdf_file/0019/1765/106021.pdf

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